RS2 plc - Full-Year Results

On 23 April 2024, RS2 plc published its Annual Report & Financial Statements for the year ended 31 December 2023.

Performance Overview

Total revenue increased by 5.7% to a record of €39.7 million as the decline in ‘Software (Licensing) solutions’ (-16% to €11.8 million) was outweighed the higher income from ‘Processing solutions’ (+19.5% to €24.9 million) and ‘Merchant solutions’ (+15.7% to €2.97 million).

Operating costs increased by 6.4% to €38 million as the higher level of marketing and promotional expenses offset the lower cost of sales and administrative expenses. As a result, RS2 achieved an operating profit of €1.70 million compared to €1.81 million in the previous financial year. Excluding depreciation and amortisation charges, EBITDA increased by 8.9% to €4.14 million and the EBITDA margin improved to 10.4% from 10.1% in the previous year.

After accounting for net finance costs of €0.26 million, tax expenses of €1.39 million, and a profit of €0.56 million attributable to minority interests, the net loss attributable to the shareholders amounted to €0.51 million (2022: loss of €0.06 million).

The Statement of Financial Position as of 31 December 2023 shows that total assets increased by 14% to €49.4 million principally reflecting the higher level of intangible assets and goodwill (+€3.21 million to €22.0 million). Total liabilities increased by 37% to €26.3 million, which include borrowings of €7.12 million and lease liabilities of €2.27 million. Shareholders’ funds contracted by 6% to €26.2 million.

Dividend

In November 2023, RS2 paid a net interim dividend of €0.01315 per ordinary share and of €0.01446 per preference share (equivalent to a total of €3 million), of which €1.3 million was paid in cash, whilst a total of 1,313,974 new Ordinary Shares and a total of 28,320 new Preference Shares were allotted. The Board did not recommend a final dividend.

Outlook

In his commentary, RS2’s Chairman explained that 2023 was a pivotal year for the Group which included several months of negotiations that translated in another major processing outsourcing agreement with one of the largest acquirers in the US. RS2’s CEO explained that the company made strong progress and executed its key strategic priorities, which positioned RS2 to increase the pace of growth in 2024 and beyond.